Gasoline prices are likely to rise this week as oil climbed back above $100 on Monday.
The national average price of gasoline was around $4.12, according to AAA data, about $0.53 higher than a month ago.
The rise in prices is expected after President Donald Trump said the United States would take steps to block all maritime traffic through the Strait of Hormuz following the collapse of weekend negotiations between Washington and Tehran.
Patrick De Haan, head of oil analysis at GasBuddy, said: “Gasoline prices are likely to rise again this week, with diesel expected to follow, until cross-strait shipping is significantly restored.”
Gasoline futures rose 4% on Monday, pointing to an increase in wholesale prices to retailers.
JPMorgan analysts recently predicted that gas prices could hit $5 a gallon nationwide if traffic through the Strait of Hormuz, a focal point of Iran’s war, remains effectively paralyzed much longer.
On Sunday, President Trump announced a blockade of the energy bottleneck, aiming to cut off Iran’s oil export route and end its practice of demanding tolls from ships.
“Effective immediately, the United States Navy, the best in the world, will begin the process of BLOCKING any and all ships attempting to enter or exit the Strait of Hormuz,” Trump wrote in a social media post.
US benchmark West Texas Intermediate crude (CL=F) rose more than 8% to over $104 a barrel, while Brent crude (BZ=F) rose 7.5% to around $102, raising concerns about renewed inflation pressure and a potential drag on global growth.
“Signs are emerging that the system may be under increasing pressure,” JPMorgan’s Natasha Kaneva and her team wrote late Sunday.
European and Asian refiners are competing aggressively for cargoes, driving physical Brent spot prices to record levels.
On Friday, dated Brent was priced at $126 a barrel, according to Platts data, after hitting a record high of $144 a barrel earlier this month.
Historically, the spread between the physical market and Brent futures contracts is modest, typically between $1 and $2 per barrel.
“Today’s much wider gap indicates that the market is struggling to get barrels for delivery now, even if it still assumes supply will normalize later,” Kaneva wrote.
Inés Ferré is a senior business reporter at Yahoo Finance. Follow her on X in @ines_ferre.
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